By
Godfrey Benjamin
April 26th, 2024
The delay by the US SEC on the VanEck spot Ether ETF coincides with reports about the agency investigating the Ethereum Foundation with claims of violating securities laws through its ICO.
The odds of the United States Securities and Exchange Commission (SEC) approving the spot Ethereum (ETH) exchange-traded funds (ETFs) have dramatically dropped in the recent past ahead of the May 23 deadline. Perhaps the US SEC is attempting to control a situation where institutional investors apply for spot ETFs for the rest of the altcoin industry led by Solana (SOL), and Ripple Labs-backed XRP. Furthermore, reports have emerged that the US SEC is attempting to classify Ethereum as a security asset.
VanEck Bid for Spot Ether ETF Delayed by SEC
On Wednesday, March 20, the US SEC released a 45 page detailing the delay to approve or disapprove the proposed rule change to list and trade shares of the VanEck Ethereum ETF. The regulatory agency noted that it needs a longer period, despite the deadline fast approaching.
The decision by the US SEC was largely expected, especially after the agency made the same move on the Hashdex and ARK 21Shares spot Ethereum ETFs earlier this week.
Notably, the regulatory agency noted that the lack of an ETP that holds spot ETH ETP exposes United States investors to immense risks. Moreover, the regulatory agency indicated that it may have different treatment of the Ether Futures ETFs and the spot Ether ETPs.
As a result, US-based investors are likely to get left out of the bullish wave as Europe and Canada-based institutional investors have access to spot Ether ETFs.
Is Ethereum a Security?
According to recent reports, the US SEC is probing several companies in its bid to classify Ethereum as a security asset. Reportedly, the US SEC could be looking into Ethereum’s ICO despite the famous Hinman email showing Ether is not a security asset. Nonetheless, New York Attorney General Tish James in the lawsuit against KuCoin Cryptocurrency exchange indicated that Ether is a security due to its ICO.
The move by the US SEC could be a blow to the Ethereum community, the entire altcoin market, and institutional investors hoping to tap into Ether soon.
However, the US SEC is likely to be slapped with a lawsuit similar to the Grayscale Investments’ one that led to the approval of spot Bitcoin ETFs earlier this year. Ultimately, the decision on the spot Ethereum ETF could be decided again through a court battle especially due to the lack of clear crypto laws from Congress.
Market Check
Ethereum price has enjoyed a bullish outlook fueled by heightened adoption by institutional investors from all over the world. Moreover, Ether is the largest web3 ecosystem with over $52 billion in total value locked and more than $77 billion in stablecoins market cap.
As a result, Ethereum’s price is likely to mirror that of Bitcoin in the near term and retest its ATH.
